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Disgruntled Shippers Rack Up 175+ Cargo Carrier Complaints

More than 175. That’s the count on the number of complaints that have so far inundated the Federal Maritime Commission (FMC) since the passage of the Ocean Shipping Reform Act of 2022 (OSRA) in June.  

The regulatory agency continues to make progress on implementation of the legislation, the first major overhaul to the Shipping Act in more than two decades. 

The FMC said last week in its latest OSRA-related update, “U.S. shippers have responded positively to the new opportunity, established via the Ocean Shipping Reform Act of 2022, to challenge carrier charges by filing charge complaints at the FMC.” 

The update indicates unrest from shippers as companies look to lean heavily on OSRA’s passage in hopes of change in ocean container shipping. 

All of the more than 175 complaints are for invoices dated after the legislation was passed and do not include those that have yet to be invoiced to shippers.  

The number of charge-related complaints prompted the FMC on Friday to clarify the interim steps it will take once those filings enter the system. 

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The Office of Investigations, after a complaint is deemed to have provided adequate information for a charge, is tasked with reaching out to carriers to explain the fee. The complaint, if a carrier can’t justify the charge to the investigations team, gets escalated to the FMC commission to order a refund or fee waiver, in addition to assessing potential penalties. 

The FMC said “experience gained from these first proceedings will guide the commission on what form a permanent process should take.” 

The agency, at the same time, is weighing a proposed rule on billing practices, which could dictate what information carriers and terminal operators would be required to provide when it comes to invoicing for demurrage and detention fees. The public comment period for that proposed rule closes Dec. 13. 

Balsam Brands, a Redwood City, Calif.-based home décor and holiday retailer, is among the companies that have weighed in on the proposed billing rules and voiced support for regulation that ensures more consistency and transparency in billing practices and pricing. 

“We understand that we are all part of the ocean logistics ecosystem and that BCOs [beneficial cargo owners, or importers] tend to absorb the lion’s share of the demurrage and detention penalties, irrespective of fault,” Balsam senior vice president of operations and logistics Michael Shaughnessy said in a letter to the FMC. “We look forward to positive changes that will reduce overcharges by providing more structure around which BCOs can assert reasonable commercial rights.” 

OSRA, which was backed by retail and fashion industry trade groups, provided the FMC with a broader scope in tackling grievances in ocean shipping in a bid to ensure competition. OSRA armed the regulatory agency with more power to investigate shipper complaints related to fees charged by ocean liners, in addition to activities dubbed discriminatory against shippers. 

Florida furniture and household goods importer OJ Commerce LLC revealed last month additional information in a legal battle it’s taken up with Maersk’s Hamburg Sud ocean liner in a case being closely watched for the potential implications it holds for other shippers. 

While the case is not related to fees, the company’s hoping OSRA offers relief in the way of damages for what it alleges to be retaliatory behavior on the part of Hamburg Sud after OJ Commerce pushed back against the carrier’s failure to make good on capacity terms promised in a 2020 contract. OJ Commerce alleges the carrier declined to negotiate terms of a new contract or make up for the capacity shortfalls when the threat of a lawsuit was raised. The situation forced OJ Commerce to have to resort to the pricier spot rate market, which attorneys for the importer said “robbed” the company of its ability to affordably transport products. 

Internal emails between executives, offered up in court last month, indicated Hamburg Sud and Maersk employees discussed the OJ Commerce dispute and ultimately decided, as a result of the potential for litigation at the time, they should not discuss a contract renewal or continue to offer the company ship capacity. 

“Maersk—and undoubtedly other carriers—will continue to willfully violate the Shipping Act because it is more profitable to do than comply with the law,” attorneys for OJ Commerce argued in court filings.